The latest U.S. Zillow Home Value Index (ZHVI)  has found tat the slow calming of the housing market that began in late summer has rolled over into the early fall, as buyers are finding slightly more selection, an increase in price cuts, and a bit more time to evaluate a home before it goes under contract.
"The housing market continued its gradual return to some semblance of normalcy in September, helped by the typical seasonal cooldown in shopping conditions that we expect to see every fall," said Jeff Tucker , Senior Economist at Zillow. "Homes are still selling quickly, and prices have not receded, but it's not quite as extreme a sellers' market as we saw back in the spring and summer. Buyers today will benefit from a little more time to pick the right home and a few more listings to choose from."
The ZHVI for the U.S. rose to $308,220 in September, up 1.6% from August 2021, marking the second straight slowdown after monthly appreciation peaked this year at 2% in July 2021.
Monthly home value appreciation slowed from August in 44 of the 50 largest U.S. metros, and monthly growth in these markets ranged from a low of 0.4% in San Jose, California, to 3% appreciation in Raleigh, North Carolina.
September did mark the fourth-fastest monthly pace of appreciation, with the typical U.S. home valued at 18.4% more in September 2021, than in September 2020, surpassing August's then-record of 17.5% year-over-year appreciation. Annual home price appreciation in large markets was in the double digits across all 50 major markets, ranging as high as 44.9% in Austin, Texas, and 32.2% in Phoenix, Arizona, dropping off to just 13.2% in New Orleans, Louisiana.
In terms of housing inventory, despite supply chain issues felt by home builders nationwide , the housing shortage remains acute in much of the nation, down 19.9% year-over-year, and 37.7% below 2019 levels. Zillow notes that the slight growth in inventory is helping shift the scales marginally in favor of buyers after hitting an all-time low in April.
For-sale inventory crept up by 0.4% from August, a smaller gain than the previous four monthly increases dating to May, but matching pre-pandemic seasonal patterns in which inventory usually peaked for the year in August or September. This is the first month in which the year-over-year inventory deficit was smaller than 20% since July 2020.
For buyers not accustomed to making hasty decisions, Zillow found that homes are taking one day longer to sell than in August, with listings going into the pending stage in a median of just nine days, giving buyers a bit more time to make their decisions. The share of homes listed on the Zillow Marketplace that saw a price cut before going under contract rose to 14.7% in September, up from just 7.9% in April.
Forecasting over the next 12 months, Zillow economists expect 13.6% home value growth through September 2022, a stronger 12-month forecast than last month, supported by a slower inventory recovery and heightened sales and mortgage application activity. Existing-home sales are expected to reach 6.04 million in 2021, up 7% from an already strong 2020, exceeding prior forecasts.
Click here  for more on Zillow’s ZHVI.